Nifty closes below 17,400; India VIX surges over 6 per cent!

The index had witnessed an amazing recovery of over 100 points in the afternoon, only to shred half of it!

Market update at 3.30 PM: The index had witnessed an amazing recovery of over 100 points in the afternoon, only to shred half of it! In the end, Nifty closed at 17,374, down by 1.31 per cent. Even the broader indices were weak today as Nifty Midcap and Nifty Smallcap fell over 2 per cent each. Fear was reflected among the market participants as India VIX surged over 6 per cent.   

All the sectoral indices closed negatively with Nifty IT falling nearly 3 per cent. However, despite bad sentiment in the market, IOC, IndusInd Bank, and NTPC emerged as the top gainers of Nifty while Grasim, Tech Mahindra & Infosys were the top losers.  

Meanwhile, Nifty has formed an indecisive candle on the weekly chart with long wicks at both sides. This indicates a tug-of-war between the bulls and the bears while the coming week would decide the further trend of the market. With such volatility and huge gap-ups & gap-downs, traders must maintain light positions.  

Market update at 1.30 PM: Nifty is off day's low and has recovered over 100 points. However, Nifty Midcap and Nifty Smallcap continue to underperform.  

IOC, IndusInd Bank, and Tata Steel have become the top gainers among Nifty stocks whereas Grasim, Infosys & Tech Mahindra are weak today.

Nifty is currently above 17,400 and this level can act as a good support level.

Market update at 12.15 PM: The indices have been unable to recover so far, as Nifty still trades around 17,300, down by nearly 1.5 per cent. Sensex is hovering near 58,000. Nifty Midcap and Nifty Smallcap are also affected by the sell-off.  

India VIX climbed 7 per cent today. Moreover, it is a broad-based sell-off as almost every sectoral index is down by nearly a per cent. However, despite such bad sentiment, there are some stocks like Divi’s Labs, IOC, and Tata Steel that are trading higher to support the market. These stocks have attracted buyers.  

However, Grasim, Infosys, and Nestle are under pressure. It remains to be seen whether Nifty will see a recovery or continue to trade lower.  

Market update at 9:45 AM: Nifty is trading lower by 230 points or 1.36 per cent while Sensex has shredded 800 points. Even the broader markets experience a severe sell-off as Nifty Midcap and Nifty Smallcap are down over 1 per cent each. 

This has led to an 8 per cent surge in India VIX. The market is clearly unstable and we wait for further clarity.

Pre-market update: Last night, the US markets fell drastically to the account of hotter-than-expected  consumer inflation data. The CPI came out to be at 7.5 per cent, which is the highest in 40 years. The CPI rose sharply about 0.6 per cent in January. Thus, Fed Reserve is expected to aggressively hike interest rates by as much as 50 bps. This led to a severe sell-off in global markets as NASDAQ slipped over 2 per cent while Dow Jones tanked more than 500 points.

Most of the Asian markets have opened lower and SGX Nifty trades near 17,400, a 190-point loss.

In the last trading session, the FIIs sold for about Rs 1,742 crore while DIIs have bought about Rs 2,727 crore worth of equity.

The precious metals have surged nearly a per cent and Crude oil has shot up by over 1.5 per cent on Friday morning.

With such a huge gap-down, the initial hour becomes quite important to anticipate further trend of the market.